14 February 2008

EXPOSURE DRAFT OF 10 NATIONAL EMPLOYMENT STANDARDS


The second day of workplace relations reform took place in Federal Parliament this afternoon with Workplace Relations Minister Julia Gillard introducing an exposure draft of the proposed ten National Employment Standards (NES).

The exposure draft was released with a discussion paper which called for public feedback on draft provisions by 4 April 2008. The Minister once again reiterated that the NES will cover the key minimum entitlements for all Australian employees from 1 January 2010.

The NES are:

1. Maximum weekly hours of work

An employee’s hours of work must not exceed 38 hours in a week. The Standard does not provide for averaging as was available under WorkChoices. However, an employer may require an employee to work “reasonable additional hours”. A variety of factors are taken into account in determining whether additional hours are reasonable.

2. Requests by parents for flexible working arrangements

A parent who has the responsibility to care for a child under school age may request their employer change their working arrangements to assist them to care for the child. Flexible working arrangements can include a reduction in hours, change to start and finish times, working from home and job sharing arrangements.

The request and the employer’s response must be writing. The employer may refuse a request only on reasonable business grounds. The NES does not define reasonable business grounds. Fair Work Australia will provide information and assistance to employers as to what may constitute reasonable business grounds. These could include the cost to the business and the employer’s ability to reorganise work arrangements.

3. Parental leave (and related entitlements)

As well as continuing the right of employees who have 12 months service (including regular and systematic casuals) to take 12 months unpaid leave, the Standard introduces the right of employee couples to take 2 sequential periods of 12 months each to care for a child after the birth. In addition, after 12 months leave an employee can request a further period of up to 12 months. The employer must agree to the request for the extension unless the employer has reasonable business grounds for refusing it.

The Standard also includes a requirement that employers making a decision that will have a significant effect on the status or pay of an employee’s position while they are on parental leave must give the employee information about, and an opportunity to discuss the effect of the decision on their position.

4. Annual leave

The Standard provides that an employee is entitled to 4 weeks paid leave for each year of service which is stated to accrue “progressively during a year of service according to the employee’s ordinary hours of work”. It is not immediately clear how often an employer is required to accrue the leave. Annual leave can be taken whenever agreed between an employee and employer and the employer must not unreasonably refuse to agree to a request to take annual leave.

There is no right to direct employees with excessive accrued annual leave to take the annual leave.

The Standard also provides that awards may include provisions allowing for the cashing out of paid annual leave.

5. Personal / carer’s leave and compassionate leave

Personal/carer’s and compassionate leave are in line with the current legislative minimums of 10 days personal/carer’s leave per annum and 2 days of both unpaid carer’s and compassionate leave per permissible occasion. One distinction with the current legislation is that personal leave is currently payable on the amount the employee ordinarily would have expected to receive. Under the Standard, personal leave is paid at the employee’s base rate of pay which excludes bonuses, loadings, allowances, etc.

6. Community service leave

An employee is entitled to be absent for jury service, voluntary emergency management activities (or other prescribed activities) for the time they engage in the activities plus reasonable travelling time and rest time. For leave of this kind other than jury service the employee’s absence must be reasonable in all circumstances. Employers must pay employees their base rate of pay for jury service.

7. Long service leave

The Standard essentially requires employers to honour long service provisions reflected in awards and other industrial instruments. It is anticipated that the Standard will work in tandem with State legislation for the time being.

8. Public holidays

Traditional public holidays are incorporated into the Standard as days upon which the employer must pay the employee at the employee’s base rate of pay if the employee is absent. An employer may request an employee to work on a public holiday if the request is reasonable.

9. Notice of termination and redundancy

The notice provisions of the Standard are in line with the current standard under the Workplace Relations Act.

The Standard sets up for the first time a legislated minimum scale of redundancy payments which an employer must pay in the event an employee’s employment is terminated because the employer no longer requires the job to be done or because the employer is insolvent, as follows:


Employee’s period of continuous service with the employer on termination

Redundancy pay period

1

At least 1 year but less than 2 years

4 weeks

2

At least 2 years but less than 3 years

6 weeks

3

At least 3 years but less than 4 years

7 weeks

4

At least 4 years but less than 5 years

8 weeks

5

At least 5 years but less than 6 years

10 weeks

6

At least 6 years but less than 7 years

11 weeks

7

At least 7 years but less than 8 years

13 weeks

8

At least 8 years but less than 9 years

14 weeks

9

At least 9 years but less than 10 years

16 weeks

10

At least 10 years

12 weeks

Employers who have less than 15 employees are exempt.

10. Fair Work Information Statement

Fair Work Australia will publish a statement called the Fair Work Information Statement which will contain information about:

  1. the National Employment Standards;
  2. modern awards;
  3. agreement making;
  4. the right to freedom of association;
  5. the role of Fair Work Australia.

Employers will be required to give employees the Fair Work Information Statement as soon as practical after the employee commences employment.



The NES will form part of the Government’s proposed safety net in conjunction with modern awards that will be created as a result of the award rationalisation and modernisation process to be undertaken by the Australian Industrial Relations Commission. Modern awards may provide industry-relevant detail and build on the NES. It is expected that modern awards may contain up to a further 10 minimum standards which can be tailored to the industries and occupations to which they apply. Further details on how modern awards interact with the NES will be covered in another alert early next week.

The NES is intended to replace the current Australian Fair Pay & Conditions Standard that was introduced with the WorkChoices legislation and subject to public consultation will be reflected in the substantive workplace relations reforms due mid year.

The next steps in the Exposure Draft process

The Government is inviting submissions from employers, employees and the wider community to provide feedback on the NES by 4 April 2008. Electronic submissions can be made through the following email address NES_comment@deewr.gov.au.

The finalised NES is expected to be included in the Government’s substantive legislative reforms to be introduced into Parliament later this year.

Stay tuned for further alerts next week on how the modern awards system will work and the interaction of modern awards with the NES.


FCB – Solutions at Work

If you would like to know more about this announcement, please contact a Partner in Sydney (02) 9922 5188 or Melbourne (03) 9614 3900.

Fisher Cartwright Berriman Pty Limited

ACN: 125 440 824
Workplace Relations Law Specialists
www.fishcart.com